Microsoft co-founder Bill Gates and legendary investor Warren Buffett‘s Giving Pledge has encouraged billionaires to donate the majority of their wealth for more than a decade. Yet Katherine Lorenz, who leads the initiative’s Next Gen group, believes many children and grandchildren of wealthy families are now pushing for a different approach to philanthropy. This approach focuses less on traditional charitable donations and more on impact investing, advocacy, and tackling the root causes of social issues.In an interview with Fortune, Lorenz said younger generations are also urging their parents to distribute their wealth sooner instead of waiting decades. She said, “I see more younger generation folks pushing on their parents to give more. [They’re saying], ‘You made enough money, mom and dad. It’s time to give it away and to give it away faster.’”“Many of them are ready to deploy the capital faster. Sometimes the barrier is the older generation,” she added.
How children of rich people are shifting their focus beyond traditional charitable donations
The Giving Pledge was launched in 2010 by Bill Gates, Melinda French Gates and Warren Buffett to encourage billionaires to commit most of their fortunes to philanthropy.According to Melissa Stevens, executive vice president of Milken Institute Strategic Philanthropy and co-author of a report on changing philanthropic trends, many younger heirs no longer view philanthropy as simply writing grants to organisations.“They’re not thinking necessarily of themselves as philanthropists. They’re thinking of themselves as their angel investors, impact investors, change makers, [and] advocates,” Stevens said. Instead of primarily funding organisations working in areas such as health and education, Stevens said younger donors are increasingly directing money toward impact investing, advocacy and venture-style philanthropy. Many are also prioritising issues including climate change, racial justice and gender equity.Lorenz said younger philanthropists are placing greater emphasis on addressing the systems behind social problems rather than only funding immediate relief efforts.Lorenz and Stevens pointed to Amazon founder Jeff Bezos’ ex-wife, MacKenzie Scott, as an example of this approach. Since 2020, Scott has donated more than $26 billion, largely through unrestricted grants that allow recipient organisations to decide how the funds should be used.Talking about Scott, Stevens said, “She is just an exemplar of trust-based philanthropy. [It’s] really leaning into that partnership with community in terms of learning from, listening to, and creating with those communities, rather than coming in with some predetermined solution.”According to the Milken Institute, Millennials and Generation X are expected to inherit around $124 trillion by 2048, increasing their influence over how philanthropic capital is distributed. The report says this shift is prompting discussions about how quickly wealthy families should fulfil their charitable commitments and where that funding should be directed.Stevens noted, “Wealth inequalities have never been greater than they are right now, and we have this sharper eye on the wealthy. It has raised the stakes.”
